Who is A.J. Palumbo?
You've seen his name on buildings throughout Western Pennsylvania, but do you know Antonio John 'A.J.' Palumbo?
Sunday, January 02, 2000
By Gary Rotstein, Post-Gazette Staff Writer
ST. MARYS, Pa. -- A coterie of college presidents is only too happy to navigate the winding, uninspiring rural roads of northwestern Pennsylvania that lead into this Elk County manufacturing town.
|A.J. Palumbo leans back in his office at New Shawmut Mining Co., St. Marys, surrounded by plaques and honorary degrees from Duquesne University, LaRoche College and elsewhere. (Darrell Sapp, Post-Gazette)|
Leaders of top Catholic institutions from Pittsburgh and elsewhere make pilgrimages to a pair of white stone buildings high on Church Street. Separated by a driveway, they are the home and office of a 93-year-old man with trifocals, hearing aids and a pacemaker who still conducts business every day.
Visitors spread their blueprints and artists' renderings on the desk of the multimillionaire with an eighth-grade education and tell him their dreams for the future, which he absorbs before taking them to lunch at St. Marys Country Club. Afterward, he places a bottle of homemade wine in their hands to take home, using a taste test in the cellar of his country lodge to determine which of his three dozen barrels they prefer.
If they make their case well, the fund-raisers drive off with something more than a warm zinfandel buzz from their generous host: They leave with his word to contribute $1 million or more to assist a project bolstering educational or health programs for young people.
And then, A.J. Palumbo's name goes up on another building.
The successful courting of Antonio John Palumbo -- "Tony" to his friends and "P.C.M." for poor coal miner, by his own favorite description -- has resulted in the A.J. Palumbo Center and Antonio J. Palumbo School of Business and Administration at Duquesne University; the A.J. Palumbo Academic Center and A.J.'s Way walkway at Gannon University in Erie; the A.J. Palumbo Science Center at La Roche College; and, most recently, the A.J. Palumbo Hall of Science and Technology at Carlow College.
A student research endowment fund carries his name at St. Vincent College, and the children's hospital of the famed Mayo Clinic in Rochester, Minn., contains the Palumbo Pediatric Intensive Care Unit.
These institutions and Elk County Christian High School in his hometown -- which just received $1.5 million from Palumbo -- collectively represent $14.1 million the poor coal miner has awarded in the past 13 years, not counting smaller donations to various causes from a charitable trust fund.
His name has become unusually visible for a small-town businessman -- "Hey, you gonna catch that concert at the Palumbo?" -- at the same time his life story is largely unknown. And though he is universally described as uncomplicated by friends and admirers, the contrasts inherent in A.J./Tony/P.C.M. Palumbo go beyond name recognition:
He focused the first 80 years of life on acquiring wealth and has used the same energy since then giving it away.
He carried a lifetime's reputation as a private, modest man but in recent years has enjoyed watching his name go up on buildings with frequency reminiscent of a Carnegie, Frick or Mellon.
He never even attended high school, but he has made higher education the favorite object of his donations, including $5 million to Duquesne from 1986-91 and $6.1 million spread among Gannon, La Roche, St. Vincent, Carlow and the Penn State-Du Bois campus in the past four years.
His gifts all relate to young people, but the troubles of the younger person he could have influenced the most -- his son and only child -- constitute the biggest heartbreak of his life. The story of Antonio John Palumbo II couldn't be more different from that of Antonio I, and it has influenced the older man's decisions about his business fortune.
Antonio was born in 1906 in Tyler, Clearfield County, to Giovanni and Annamaria Palumbo, recent arrivals from Gallo, Italy, near Naples. His three older brothers and an older sister were born in Italy, where the sister, Anna, returned permanently because of illness when young. Her youngest brother never met her.
The family lived on a working farm, and Giovanni Palumbo managed and eventually owned a coal operation for which his sons all had a turn laboring. Antonio was in mines from age 12, working first as a blacksmith, building muscle while shoeing the mules that worked in the mine. He also gained accounting skills and kept the books for his father's company.
His was the kind of hard-working immigrant family that saturated Western Pennsylvania, maintaining the old country's language and customs at home while striving for financial success.
"My parents, they were good to us, but strict -- the Italian way," Palumbo recalled. "I'm not complaining."
In fact, he embodied the old-fashioned values taught by the father he respected and obeyed: work hard, show discipline, be honest, don't squander money.
He partnered with his father in 1932, when he was 26, in purchasing the Underhill Mining Co. In 1938-39, he attended Penn State for six months to obtain certification as a mine foreman, which was required in order to supervise groups of men in the mines.
He formed the New Shawmut Mining Co. on his own in 1947 by acquiring several firms that had been bankrupt or struggled. One older brother was a mine foreman for Palumbo, while two others started their own meat businesses in northwestern Pennsylvania.
He had married in 1939 but still worked relentlessly, a minimum of 12 hours at least six days of the week, and sometimes Sundays and even Christmas. His two coal companies had a payroll of more than 400 employees in the 1950s, but those were not the key instruments of his eventual wealth.
With the purchases of the coal company properties and other land acquired cheaply at sheriff's sales in Jefferson, Elk and Clearfield counties, Palumbo became a shrewd, strong land baron. He had 40,000 acres rich with not just coal but also gas and timber.
When other businessmen approached with proposals to do their own work extracting coal, drilling wells and cutting trees on his properties -- as they invariably did -- he dealt from a position of strength. They needed him more than he needed them.
A barrel-chested man with a knack for reading other people from under his own pronounced, black eyebrows, Palumbo negotiated royalty deals that were unheard of locally in the industries. He savored the challenge of doing so. By the mid-1960s, he quit running mining operations himself and enjoyed the fruits of other people's labors on his land.
"Tony gets higher coal royalties than anybody in the three-county area. He's been in a position for 40 or 50 years that he doesn't have to act" until the details suit him, said Joe Coddington, Palumbo's geologic consultant. "He was a great negotiator, always has been."
"I'd rather negotiate a business deal than eat," Palumbo affirms, while describing an ability to understand another person's position and interests almost as well as his own.
"When you size up a person, disregard the words," he advises, "because he can tell you anything you want. Instead, read the face."
His own face today is characterized by an impish smile, bright eyes and a thatch of wavy, white hair, all atop a frame that has diminished over the years. His office, home and the lodge south of town look as they might have decades ago -- since he has ignored much of the technological revolution -- with old television consoles occupying space instead of computers.
Palumbo still derives income from other people's use of his land, in addition to reaping benefits of longtime success in the stock market from self-managed investments. He goes into the office for about seven hours on weekdays, stepping slowly across the driveway to and from home. He likes to "work the mail," keeping track of contracts and permits and other essential details.
And then there are the people writing him, phoning him, seeking his money. The lucky ones are granted a personal appointment. The visit is described as like going to the court of a beneficent ruler, making an appeal to his wise investment decisions. This is the kind of deal-making that Palumbo warms to today.
The year he turned 80 was an important one in the Palumbo story.
His wife of 47 years, Sigismunda, died in 1986 after a stroke and a lengthy Alzheimer's affliction. He met his eventual second wife, Janet, 38 years younger than he. The sensible former schoolteacher, whom he married in 1991, was the daughter of Pittsburgh businessman James J. Ferry, a friend and contemporary of Palumbo's who served with him on the board of Three Rivers Bank.
And Palumbo made his first major donation that year, the one that assured people would know his name and remember it long after he was gone.
Duquesne University was at a low point of finances and reputation in the mid-1980s while under the administration of the Rev. Donald S. Nesti. University officials identified one of their key needs as a new recreation complex and basketball arena that would be attractive to everyday students as well as scholarship athletes. The cost to build the facility on Forbes Avenue was estimated at $11 million, but funding was scarce.
Noble Dick of the Dick Corp., a major Duquesne donor, told Nesti and university board members of the potential interest of his friend Palumbo, whom he had encouraged to consider putting his wealth to good use. Palumbo, a Catholic enamored with the idea of discipline as part of a formal education, had developed a Pittsburgh orientation over the years from business ties and friendships made through his Duquesne Club membership.
Although Palumbo's charitable contributions to that time were relatively modest donations from a trust fund he established in his and his first wife's names in the 1970s, Duquesne officials settled on him as a man who might give millions to lay the financial foundation for the sports complex/concert hall, considered a symbol of the university's rebirth.
Palumbo was no big sports fan, but the timing appeared right for him to make an impact with a gift used the right way. That meant he had to be sold on the facility's use for more than just a basketball court, recalled Isadore Lenglet, who was then the university's fund-raising strategist.
"His form of negotiation was to ask, 'How is it going to be used? Is it going to be worthwhile? Is it going to be fully utilized?' He doesn't want to give you the money for a flimsy thing that will gather dust. ... If it was just for a basketball arena, we wouldn't have gotten a dime," said Lenglet, now the school's executive vice president for management and business.
Nesti and Lenglet won Palumbo over. One of Nesti's selling points was to let Palumbo know the facility would be named in his honor. The unassuming octogenarian was reluctant but only initially.
"He was very humble about the whole thing," Lenglet said. "He was not doing this to get his name out there at all. He was very interested in the project and what it would do for students."
Palumbo warmed to use of his name to the extent that he recommended the initials A.J. as part of the title, to distinguish him from any other Antonio Palumbos. And his Palumbo Center gift, reported as $3 million initially, ultimately amounted to $3.5 million, giving Duquesne the base for the bond issue to complete the building's financing and opening in 1988.
He was a board member by that time and formed a strong relationship with new university president John Murray, who persuaded him to donate $1.5 million in 1991 to upgrade the business school.
"People give to success, not to failure," Palumbo said of his decision to contribute more after watching Murray's ballyhooed turnaround of the university.
Once word got out of his generosity to Duquesne, it was only a matter of time before others traveled to St. Marys.
It's one thing to be on the methodically researched, confidential lists of potential donors compiled in college development offices. It's another to have your name emblazoned in lights and attached to a university's most prominent building, with newspapers publicizing the millions of dollars you gave to build it.
Palumbo knew what he was getting himself into, with everyone from Catholic bishops to O.J. Simpson's legal defense fund asking him for money since then. Disinclined to any lavish lifestyle, other than the pleasures of traveling, he told friends in the mid-1980s that he would begin dispensing his wealth to institutions he felt symbolized his values.
One of those he has supported is the Mayo Clinic, where he has flown to receive health care for 35 years because he believes it is the best facility of its kind. He is close friends with his physician there, Dr. E. Rolland Dickson, who also has become director of development for the Mayo Foundation. He donated $1.5 million in 1996 for the new pediatric intensive care unit, following smaller contributions.
"What he said to me one night is, 'I want to give some of what I've earned back to people who have worked hard,' " Dickson said. "He began about 15 or 18 years ago to take a greater sense of responsibility in saying, 'I've been very fortunate, I've accrued a lot of assets, I've been successful, and somehow I feel an obligation to pay this back to society,' and particularly to help young people achieve their fullest potential."
His giving has accelerated as the 1990s have progressed, and many of the recipients say they have come to know Palumbo as a friend or father figure, rather than just a funding source. The presidents of Gannon, La Roche, St. Vincent and Carlow all learned his preferences based on the Duquesne model -- he likes to give to private rather than public institutions; he likes to be approached as an "investor" by the institution's highest-ranking executive; he tends to support bricks-and-mortar projects, though he has also created scholarship funds.
And the others all learned from Duquesne that Palumbo is flattered by the idea of having his name on their buildings. He doesn't have to ask for it.
"They know it's been done in the past, and they know he apparently likes it," observed Palumbo's attorney, Carl Belin Jr. of Clearfield.
If a proposal suits Palumbo after a couple of meetings, he's prepared to write out a single check in the seven figures, always signing with the green ink of a fountain pen. The large, quick payments differentiate him from most major contributors, who space out their donations in annual installments or bequeath the money upon their deaths.
Carlow's president, Sister Grace Ann Geibel, laid out a plan several years ago to Palumbo for a new science school. Within weeks, he told her he would contribute $1.5 million, which Geibel calls the most significant individual donation in the school's history. A short time later, he was in her office presenting her with a check of that amount.
"He does it so simply -- there's never a flourish with him," she said.
Palumbo has accepted positions on the boards of all of the Catholic schools he has supported. He was a regular participant in Duquesne's meetings a decade ago, but his health has curbed his attendance there and elsewhere in recent years. He receives information by mail and speaks occasionally with the presidents.
Gannon University, which has received three gifts totaling $1,775,000 from Palumbo since 1995, even keeps a small office for him with a desk and phone in its A.J. Palumbo Academic Center, though he never goes there.
Monsignor David Rubino, the Gannon president, said the fund solicitations, building names, board positions and the office are all linked in the feel-good, person-focused approach that characterizes college fund raising with such philanthropists.
"He has to have faith that we are prudent stewards of his resources," Rubino explained. "If you're going to get someone to invest in you, you want them to be able to watch over their investment."
Friends and relatives say Palumbo has enough of an ego to enjoy the attention bestowed upon him. The multiple plaques of recognition from each college all go up prominently on walls of his office, home and lodge rather than into storage. The honors make him feel appreciated for putting his money to good use, even if recognition isn't his primary motivation.
When asked about all the building names shortly after the new Carlow building was dedicated in October, he shrugged and said, "It's just a thing. You know."
Feb. 22, 1980, was one of the most difficult days of Antonio John Palumbo's life.
The tough-minded private man who had the composure to handle any business challenge, who had stared evenly across the table at powerful United Mine Workers President John L. Lewis in contract bargaining sessions, found himself sobbing uncontrollably in the Pittsburgh courtroom of U.S. District Judge Donald E. Ziegler.
Antonio J. Palumbo II, already an Indiana County Jail inmate for a bookmaking conviction, was facing a new sentence after being found guilty of counterfeiting and cocaine distribution. The son, then 38, was also a gambling addict, in contrast to the successful father who had been so careful with his money his whole life.
Between tears on the witness stand -- Ziegler told the older Palumbo to step down and compose himself at one point -- the father pleaded for leniency in sentencing and promised to use his $750,000 annual income to help his son receive treatment and turn his life around.
"I pray the court release my son on probation on the condition he receives help," Palumbo said. "He's sick, he needs medical help. Before, he wouldn't admit that, but I received a letter from him and he admitted his gambling problem."
Ziegler listened and sentenced the younger Palumbo to five years in Allenwood Federal Penitentiary. Later, the drug conviction was thrown out on appeal, and the sentence was reduced to three years.
Friends and relatives say Palumbo has never turned his back on his son despite their dramatic difference in lifestyles. He has supported his namesake financially, though not so as to make him rich, and he doesn't talk much with others about family difficulties.
"When I think back, and Tony will admit it, it's probably the only failure of his life," longtime friend Coddington said.
Palumbo said he has tried to help his only child, known as "Sonny," to establish himself in business four different times but none of the ventures panned out.
"He didn't like the coal business," Palumbo says quietly, uncomfortably. "He doesn't like to work."
He is at a loss to explain the decisions made in life by his son, whom he sent to military school in Valley Forge when recognizing disciplinary problems at an early age.
"It's one of those things that hurts -- what can I do?" the father says now, looking down at his desk.
The younger Palumbo, who did not want to be interviewed for this story, was closer to his mother when young but makes daily phone calls to his father now. The father said Antonio II, 58, has an associate's degree in accounting from Robert Morris College and is working on a bachelor's at Wheeling Jesuit College, with interest in attending law school afterward.
Palumbo's work ethic leads him to say the bulk of the wealth he accumulated with his own sweat and risk shouldn't go automatically to any individual upon his death, though family members will receive some. His son's history only contributes to his determination to prepare his money for other uses.
"There's a case of, if I leave $5 million [to his son], in four years it'd be gone," Palumbo said. "Easy money is easy spent. It means much more to work and earn the money than just spend it."
The poor coal miner was extraordinarily healthy for someone his age all through his 80s, but in recent years his trips to the Mayo -- on a private plane rented in Du Bois -- have increased in frequency, because of various ailments. In the 1970s, he made a full recovery from a heart attack, but his heart condition is a concern now, as for anyone his age.
He remains a quick-witted host, though he no longer organizes hunting parties and golf tournaments in which he entertains dozens of people with grilled steaks and wine at his lodge. He has outlived almost all of the friends of his age, and his close relationships are with people a generation younger. His trips to Pittsburgh have become less frequent, though he retains a condominium on Mount Washington.
Palumbo still throws himself each fall into the wine-making tradition at the lodge with the help of a neighbor and his nephew, Joseph Palumbo, a businessman and kindred spirit. Palumbo used to assist his father the same way, and he has trained his nephew over the past two decades well enough that Joseph can keep pressing the grapes and producing new barrels himself if Palumbo is unable to take part.
Palumbo also has arranged for others to spend his money the way he wants once his capacity to control it ends.
The large donations written in green ink from his checkbook -- like those made this fall providing his local Catholic high school with $1.5 million for expansion and La Roche College with $500,000 for scholarships -- are likely to dwindle while the importance of the trust fund he began at PNC Bank more than two decades ago increases.
The trust fund, valued in excess of $17 million, is required to disburse at least 5 percent annually to charitable causes, with decisions made by a board that he chairs. Once he is no longer chairman, the friends and associates who make up the board will continue giving and use as a guide his emphasis on young people, particularly their education and health.
"I think Tony's dream is to create a fund that will be perpetual aid to the people he wants to help," said Belin, his attorney. "Tony is becoming very conscious of the fact that like others, he can see down the road, and it's not too far. He's more and more dealing with the fact of his mortality. ... The trust fund will grow, and his legacy will go on giving."
His wife says Palumbo is a man who has been in a hurry to get somewhere all his life. He is legendary for driving with a heavy foot, and still does so when his health allows it in a 1991 Mercedes 500SL bearing the license plate, "AJP-PCM."
But now that he can't help but slow down, he is a man who seems at ease with his decisions. His brown eyes twinkle with satisfaction when he's asked about his donations, or when he meets with students of his favored colleges to espouse his philosophy of working hard.
He is a church-goer, but the sense of discipline he associates with Catholic institutions -- rather than any religious doctrine -- is what focuses his attention in their direction.
"I believe in education, and the competition is getting keener and keener. You've got to prepare," Palumbo says. "Can you tell me a better investment than in the future of your country? Some people say, 'What do you care? You're going to die anyway.' That's not the way to think. I like to do what I can to help, and still make a living."
After all, A.J. Palumbo has his name to consider -- a name for a lot of other people to know as well.